Item 5: Fees and Compensation
Markel|Eagle Partners Fund I, LLC and Markel|Eagle Partners Fund, II, LLC
We receive both an advisory fee, based on the assets in each respective Fund, and an incentive
allocation for managing each Fund. The asset-based fee is 1.75% per year calculated against the
Fund’s aggregate capital commitments during the Fund’s investment period, and calculated
against the tax basis of the Fund’s assets thereafter. The advisory fee is payable quarterly in
advance, based on the capital commitments or asset value, as appropriate, as of first day of the
calendar quarter. There is no refund provision for the advisory fee.
As the manager of pooled investment vehicles, each investor irrevocably appoints us as an
attorney-in-fact with authority to establish, manage and maintain all bank, mutual fund and
securities brokerage accounts as needed for the purposes of the Funds’ investments. In this
capacity, we have the authority to withdraw the advisory fees, carried interest, expenses and
capital from each Fund’s bank account.
For qualifying investors, we receive a carried interest in the Fund generally equal to 20% of the
profits generated by the Fund after the investors have received aggregate distributions from the
Fund equal to their total capital contributions plus an annual return of 8% (Preferred Return) on
their net capital contributions (i.e. total contributions minus distributions received in excess of
this annual return).
If upon liquidation of the Fund, the investors, of that Fund, have not received cumulative
distributions equal to 100% of their capital contributions plus the Preferred Return; we will be
required to return the after-tax amount of distributions we have received in respect of our carried
interest, to the extent necessary to pay this deficiency. However, we will have no liability to
return distributions beyond this after-tax amount.
These fees may be reduced by agreement in limited circumstances.
Other Costs Involved
In addition to our advisory fees explained above, each Fund may pay certain expenses associated
with its investments. These fees include day-to-day administrative and operating expenses of the
Fund, including due diligence expenses associated with potential investments, fees and expenses
of real estate sponsors, and fees and expenses of developers and property managers. Other fees
may include custodial/bank fees, auditor fees, fees for tax accountants and other operating
expenses. Additional details related to these costs are provided in the Fund’s Private Placement
Memorandum, Advisory Contract or offering materials.
BV Phoenix, LLC
Markel|Eagle receives an annual advisory fee equal to one half of one percent (0.50%) of the
total asset value of the property owned by the fund, as defined in the partnership agreement,
payable in quarterly installments in advance and calculated as of the last day of the immediately
preceding calendar quarter. The fee shall be pro-rated for any partial quarter and each
installment shall be payable as of the first business day of the quarter.
The Fund will pay or reimburse Markel|Eagle promptly, against the Firm’s receipt or voucher,
for any reasonable, documented expenses incurred by us for the Fund’s account. Without
limitation, such expenses may include (a) coach/economy class travel, communications, research
and other expenses related to due diligence conducted by Markel|Eagle with regard to proposed
or completed transactions by the Fund; (b) costs of the Fund’s periodic reports to and other
communications with the Fund’s Members to the extent prepared by Markel|Eagle; (c) all
transaction costs incurred by Markel|Eagle in connection with the acquisition, holding, financing
and/or disposition of assets of the Fund.
Short Pump Credit Partners, LLC
Markel|Eagle does not receive a fee for its advisory services provided to Short Pump Credit
Partners, LLC. The Fund will pay or reimburse Markel|Eagle promptly, against the Firm’s
receipt or voucher, for any expenses incurred by us for the Fund’s account. Without limitation,
such expenses may include (a) travel, communications, research and other expenses related to
due diligence conducted by Markel|Eagle with regard to proposed or completed transactions for
the Fund; (b) costs of the Fund’s periodic reports to and other communications with the Fund’s
Members to the extent prepared by Markel|Eagle; and (c) all transaction costs incident to
portfolio transactions incurred by Markel|Eagle for the Fund’s account, in proportion to the
Fund’s participation therein; and (d) any indebtedness incurred by Markel|Eagle for the Fund’s
account in the acquisition or holding of any portfolio investments by the Fund and any related
interest or finance charges.